MilanStatuary manufactures bust statues of famous historical figures. All statues are the same size. Each unit requires the same amount of resources. The following information is from the static budget for2017:LOADING...(Clickthe icon to view the static budget data.)Standard quantities, standard prices, and standard unit costs follow for direct materials and direct manufacturing labor:LOADING...(Clickthe icon to view the data.) Read therequirementsLOADING.... Requirement 1. Calculate the sales-volume variance and flexible-budget variance for operating income. Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable (F) or unfavorable (U). (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label.) Actual ResultsOutput units Revenues Direct materials Direct manufacturing labor Fixed costs Total costs Operating income Data TableStandard QuantityStandard PriceStandard Unit CostDirect materials15 pounds$10 per pound$150Direct manufacturing labor3.3 hours$50 per hour$165During 2017, actual number of units produced and sold was 4,900, at an average selling price of$740. Actual cost of direct materials used was $743,750, based on 62,500 pounds purchased at$11.90 per pound. Direct manufacturing labor-hours actually used were 19,500, at the rate of$41.00 per hour. As a result, actual direct manufacturing labor costs were $799,500. Actual fixedcosts were $1,190,000. There were no beginning or ending inventories.PrintDoneer. Data TableExpected production and sales6,900 unitsExpected selling price per unit$700Total fixed costs$1,350,000PrintDone

Standard costing in simple terms can be defined as a system in which the standard costs and revenues…

Answered: Milan Statuary manufactures bust…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Milan

Statuary manufactures bust statues of famous historical figures. All statues are the same size. Each unit requires the same amount of resources. The following information is from the static budget for

2017:

(Click

the icon to view the static budget data.)

Standard quantities, standard prices, and standard unit costs follow for direct materials and direct manufacturing labor:

(Click

the icon to view the data.)

Read the

requirements

Requirement 1. Calculate the sales-volume variance and flexible-budget variance for operating income.

Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable (F) or unfavorable (U). (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label.)

	Actual
	Results
Output units
Revenues

Direct materials
Direct manufacturing labor
Fixed costs
Total costs
Operating income

Data Table
Standard Quantity
Standard Price
Standard Unit Cost
Direct materials
15 pounds
$10 per pound
$150
Direct manufacturing labor
3.3 hours
$50 per hour
$165
During 2017, actual number of units produced and sold was 4,900, at an average selling price of
$740. Actual cost of direct materials used was $743,750, based on 62,500 pounds purchased at
$11.90 per pound. Direct manufacturing labor-hours actually used were 19,500, at the rate of
$41.00 per hour. As a result, actual direct manufacturing labor costs were $799,500. Actual fixed
costs were $1,190,000. There were no beginning or ending inventories.
Print
Done
er.

Data Table
Expected production and sales
6,900 units
Expected selling price per unit
$
700
Total fixed costs
$
1,350,000
Print
Done

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

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